Posts

The cost of replacing current employees is astronomical when you factor in the time it takes to hire and train them. As well as, the time associated with hiring and training new employees. Considering these costs, it is difficult to fathom why not all employers are laser focused on employee retention.

If you have an employee that’s about to walk out the door, should you offer them more money to avoid those costs? It is important to understand just how important salary is to maintain your workforce.

The Gap in Understanding Employee Retention

Polling shows that around 75% of employees that left a position did so for reasons other than pay. However, 90% of managers believe that money is the driving factor behind employee loss. In reality, if employees don’t feel good about the environment that they are in, or the work that they are doing, no amount of pay can keep them in your office. Studies suggest that appreciation for their work was the single most important factor, followed by their relationships with coworkers.

Fostering Employees

While pay is often a tangible method of showing employees that you appreciate them, many don’t feel that it is important as regular feedback and praise when they have done something positive. Rather than simply look to increase employee pay, many companies choose to offer other incentives for great employees.

Additionally, making sure to help employees maintain positive work environments with their coworkers can pay great dividends. These can be simple group presentations or activities, breaks or quarterly lunches together. Simply making sure that you understand your employees’ needs, and then taking concrete steps to improve the work environment for them can lead to higher overall retention.

Present the Ladder

Over time, many employees will want to grow their own skills and take on increasingly difficult tasks for the company. Introducing a plan for employees to climb the ladder within the company can lead to motivated staff that works hard to understand all aspects of your business. You can also be sure that when your internal employees receive promotions, that they will be ready to hit the ground running.

If you want to increase your employee retention, it is important to look beyond the paycheck and find out what really matters to your staff.

People start a new job hoping to stay, gain skills, and advance their careers, right? Quitting is not part of most new employee’s mindsets, right? Wrong! As many as 1 in 3 employees leave their jobs within the first year. Even more alarming 22% of employee turnover happens within the first 6 weeks of employment. According to the U.S. Department of Labor, 3.6 million employees quit their jobs by mid-2018, the highest percentage since April 2001.

Employee Turnover is Costly

Simply put, the cost of an employee quitting in the first year can be up to three times of that employee’s salary. Ouch!

Delve into Why Employees are Quitting

Looking into the reasons behind high turnover can be insightful. What you learn promises a brighter outlook for the future—for employees and your business. Here are some key reasons why people quit:

Poor communication causes employees to feel disengaged.

They don’t feel valued. Opportunities to learn and advance are unclear or nonexistent.

Their abilities and potential are overshadowed by what they need to correct.

Lack of training.

Lack of flexibility.

Inadequate Pay and benefits.

Learn About Employee Expectations

Gallup published a report in 2015 that presents data about the relationship of employee engagement and manager characteristics. The report summarizes studies with thousands of participants, clearly detailing reasons why employees quit. Take a look at these take-aways:

Consistent communication by the manager increases employee engagement. Various forms of communication work, including in person, email and phone.

After you have hired someone, don’t simply unleash them to figure things out on their own. A new hire orientation program can help your new hires better understand how their job fits into your overall mission. The first few months in a job are crucial for new hires in establishing positive mindsets about their duties, co-workers and the company. New hire orientations are essential to ensuring that new hires are successful and also boosting employee retention. New hire orientation planned for this early period must not only provide job-related information but also foster a clear understanding of your firm’s philosophy and core values.

Here are some strategies to think about when you are building a new hire orientation program.

Host a New Hire Orientation Reception

It is important for new staff to meet the people that they will be working with. This is beneficial for everybody to put names and faces together and to help them effectively collaborate in the future. It is also important for everybody to share what their roles are and how they might be complementary to the new employee.

Assign a Mentor for a Year

These longer commitments from your existing staff will help to integrate employees as they work through a steep learning curve. Showing that you are putting a major investment into the new employee can also help motivate them because they can see that you are putting in significant resources for their success.

Be Clear About the Position

It is important to reiterate what the day to day tasks are for the position. You should also tie in the overall mission, emphasis on a work-life balance, and how they can measure their success in the company. Clear expectations and guidance can help any employee quickly integrate into the team.

Help them Align with the Company

Employees are a company’s most important asset. Assuring that employees feel their personal strengths can be demonstrated in their current position will help them function more effectively. Talk to them about the things that they like in their work environment. Strive to match employees with their strengths.

Start Career Development Early

When employees can see that they have a future with the company, retention and productivity are higher. They are more apt to be invested in the company’s mission and strive for a deeper understanding of the projects they work on.

New hire orientation periods can greatly increase a company’s overall success. With some simple guidance, you’ll set your employees on the right track.

Contingency and retained recruiters are unwittingly doing the job of employee retention for their clients and in the process, getting candidates some startling promotions. Leadership is too lean, maxed out and overwhelmed. Many people are realizing that they can do better: get the promotion, stretch their skills into a new area, have more flexible work hours, reduce their commute and increase their salary.

The Candidates

In defense of truly great candidates, I genuinely believe that most of them engage me with the intention to make a move and not just to leverage a deal to stay put. But, many get weak-kneed and remain with The Devil-they-know. It’s just human nature. The truth is, most people aren’t really unhappy. In our current employment market, the best talent isn’t looking for more money. They are looking for that “one thing” that they want to improve their lives. Previously, when I secured candidates that “one thing” or even three things, things they never requested, I knew I could change a life. That is the juice that has kept me in this game all these years. Not so much now.

Who’s Fault is it Anyway?

After the economic downturn of 2008-9, companies leaned up, it was a time to reconcile too many bloated and gluttonous years. Companies had to switch things up, get nimble and creative again. Fast forward to today; now flush with cash, these companies have learned how to be lean and profitable, determined to go yet another quarter without additional headcount. This was a pivotal moment, an important lesson.

Senior Managers have been overwhelmed, reaching the limit of being so deep in the weeds. They have done their part in rebuilding, shouldering the burdens to turn their shops around while sales increase. They need support. So, let’s hire! But wait… That 3-year Senior costs what? $85-90K? While you weren’t looking, the world changed. And your list of candidate “must-haves” have become expensive. You might have to cut that list down a bit or you could be waiting a long time to find that haystack needle. Hire someone smart and driven. They will learn quickly. Grab that 2-out-of-3 while they are still on the market. And if you want someone that doesn’t need any training or development, hire a highly-paid consultant to get you over a hump.

Supply and Demand

With available professional talent below 2%, candidates are king. Budget busters! But it’s time to reallocate some of those dollars for essential hiring because here’s the real issue: parity. That affects the entire organization and stalls, even shuts down, the hiring process. HR and Comp professionals that’s where you come in! Advise your leadership team of the massive shift that has taken place and the need to properly level out your teams. This is where the relationship with seasoned recruiters is most valuable. Professional recruiters live this every day. We see trends often before you do. Your salary surveys from last year when the budget was created are passé. The market for talent shifts monthly, almost weekly.

Cost

What does it cost to lose a solid employee who knows her job inside and out? Plenty! Lost productivity, morale, adding additional work to the team, training, loss of succession planning… Oops! Should have been more proactive in engaging the workforce in their happiness quotient. Those counter offers you never made? Now you do! There have been some doozies, too. 30-40%, with fluffy new titles and retention bonuses. And then there are those that aren’t so impressive but just acknowledging that an employee is needed is all it takes sometimes. The Devil-they-know. Of course, the vast majority of these candidates will be back on the hunt within a year. Statistics don’t lie.

Luring the Best Talent

The economy seems flush. But is it? Many are bracing for another downturn. For now, many companies are growing and employees will continue coming and going. So, how do you lure the best talent? You don’t have to be trendy to attract great people. Instead, have a great story about who you are, how you got there and where you are heading. Be flexible with work hours and telecommuting. There is nothing more important to candidates than flexibility.

But, and this is a big but, if you are not prepared to bust that budget you set last year and make a truly jaw-dropping offer, don’t expect to see that candidate showing up on their new start date. Their current employer will suddenly realize how much they are loved, bring out the violins, and that’s the end of that. Low-balling is the death knell of the hiring marketplace. Take your recruiter’s sage advice!

So, here we are, in a unique time in the World of Work to address this crisis of employee retention. Just how to do it? Employee engagement. One-on-one. Frequently. Don’t wait for the annual review. That’s too late. And give them support. Employees need to be heard and maybe offered good food every now and then. They don’t need many fancy perks at work — who really has time for that? They just want to do challenging work, keep the Devil at bay, and get home to their real lives.

About the Author:

Valerie Rodriguez, Director of Consulting and Executive Search, Beacon Resources. Val specializes in guiding clients from startups to Fortune 1000 in growing their business and manages project initiatives through the acquisition/retention of top talent and identification of first class finance and accounting professionals in the Southern California region.

The problem with hiring exemplary accounting and finance professionals is everyone wants them. Once you’ve managed to snag a solid workforce, you have to ensure you do your part to keep them right where they are. Here are five low-cost strategies for boosting your employee retention rate.

Promote from Within

The next time you need to fill a position, go to your current employees first rather than post an ad on a job board. You never know if your team members have been thinking about taking on a new role or a more advanced position, and you also might not know if they’re just as well-suited (if not more so) as outside candidates.

Employee Relaxation = Employee Retention

Stress is easy to come by in the modern workplace. Rather than have your employees hurry out of the office to find peace and quiet, provide them with such a place inside your office. Setup comfortable couches, chairs, games, books and a coffee table where your employees can kick up their feet and relax for a little while. A few moments of peace can do wonders for mood and productivity.

Make It Easy for Employees to Be Passionate

When you’re emotionally invested in something, it becomes a pleasure rather than a chore or a means to an end, and the same applies to your business. Whatever service or product your company provides, get your workforce passionate about it, which involves making sure they have all the information and details necessary to accurately understand your business and its wares or services.

Encourage Feedback

Rather than rack your brain thinking of ways to improve your business, turn to your employees. Your workforce is sure to appreciate you asking them for their insight, and they’ll appreciate it even more if you actually use their suggestions.

Birthdays Off

Simply put, who wouldn’t want to remain with a company that lets you have your birthday off?